Experts shoot down proposed Agriculture budget
Business
“My grandfather used to say that once in your life you need a doctor, a lawyer, a policeman and a preacher but every day, three times a day, you need a farmer’’ – These are the words of one of the most celebrated global modern day famers, mentor and motivational speakers Brenda Schoepp.
These words were reiterated here in Botswana this week by different stakeholders when the paramount importance of Agriculture was discussed in relation to the 2018/19 Budget proposal which was presented to Parliament on Monday. Commentators have expressed concern in regard the little money allocated to Agriculture by government. This year Agriculture has only been allocated 3% of the overall budget, which is a far cry from the 10% ceiling, which the regional standard.
According to experts and agricultural advocates the lack of adequate budget to the agriculture sector subsequently means no infrastructure development to support the sector, no road networks to connect farm lands with market places, no development of innovative solutions in response to climate challenges facing the sector.
At the First National Bank Botswana(FNBB) Budget Speech Review held at the GICC on Tuesday, just a day after Minister of Finance & Economic Development, Kenneth Matambo delivered the 2018/19 Budget Speech, various speakers made the same call – the money proposed for agriculture is way too little.
The common denominator in various submissions by different speakers centred on the fact that agriculture has demonstrated before (through numerous scientific studies and economic research findings) that the sector is a potential remedy to Botswana’s economic diversification headache.
At independence Agriculture contributed over 30 % to the country‘s Gross Domestic Product (GDP); but today the sector has been relegated to a mere 2 % replaced by the lucrative Diamond & Tourism industries . Pre-Independence Batswana lived out of pastoral and arable farming – today the sector is still the source of livelihood for many ordinary Batswana especially those in the rural settlements. The major concern is that on a national scale Botswana cannot feed her 2 million people. The country still imports over 50 % of almost every food commodity predominately from neighboring South Africa.
Minister Matambo announced a 1.34 billion pula budget proposal for the Ministry of Agriculture in the recurrent budget, this will not bring any significant improvement to the sector that supposedly should be feeding Batswana. This has been referred to as underfunding by Botswana Agricultural Marketing Board (BAMB) head of Agronomy, Lambani Obuseng.
Obuseng expressed his concern in the morning session of the budget review which tackled issues in the sectors of agriculture & energy. He said it was pivotal for the government to review the 3 % expenditure which is not enough to develop and resource agriculture sector.
It emerged at the session that Maputo declaration of the 2003 African Union Summit dictates that member states need to spend at least 10 % of their total budget on Agriculture. “Botswana has not been doing that for years since this agreement, it’s a cause for concern,” observed Obuseng.
The Agronomist also said that Agriculture was a complex sector especially when a country wants to produce on a large scale and promote commercial farming. He said with unfavorable and evolving climate conditions Botswana must move with times and be innovative to realize significant contribution of this sector on the economy.
“Modern day farming technology requires capital and to produce on large scale requires capacity, and that is to say there has to be deliberate spending and will from government side to resource these requisites,” he said. Obuseng further observed that though government has tried with a number of initiatives in the past years to grow the agricultural sector, it continued to decline as a result of certain operational challenges that continue to besiege the sector. Some of these challenges include but not limited to poor soil fertility, dependence on simple manual tools, low adoption levels of agricultural technology and poor infrastructure.
Adding to Obuseng’s views, Clover Botswana General Manager, Mike Joyner observed that the funds allocated to the agriculture sector were inadequate. “This 3 % is against a number of propositions adopted in different regional foras. The SADC strategy on agricultural development submitted that agro-processing was a key sector for development. You cannot develop agro procession with this kind of un-prioritized funding that leaves agriculture with the remains of the budget,” he said.
Renowned Beef mogul, Mr Clive Marshall shared on the challenges facing the beef sector such as low returns for cattle producers and lack of market access. He said for Batswana to venture into beef processing and get in feedlots operation in large numbers funds must be availed by the government.
In the main event of the FNBB Budget Review staged in the evening, just before speakers from different sectors of the economy took the podium to dissect and interact on Budget speech, the FNBB Chief Executive Officer, Steven Bogatsu took the stage and hit hard on what he termed lack of will from Government to develop the agriculture Sector . In his welcome remarks, Bogatsu sent a message to government enclave: “why do we still spend less on agriculture while the sector has proven beyond reasonable doubt to be able to create jobs?”
Bogatsu further said it was irrational to continue spending money on importing agricultural produce year and year out while we can inject funds in developing our own sector and produce food. The FNBB CEO also touched on the beef industry, “why do we still operate Botswana Meat Commission in this model while it was making losses year and year out?”
Bogatsu cited Botswana-De Beers relationship as a benchmark model, “we have a good relationship with multinational corporations like De Beers. Why can’t we adopt the same model for BMC and take the beef industry to the next level?”
Government was advised to seriously consider reviewing the budget proposed for agriculture.
Business
New Khoemacau owners commit to mine’s multibillion Pula expansion
The future of Botswana’s largest copper and silver operation, Khoemacau Copper Mining, looks promising as the new owners, MMG Group, commit to the mine’s expansion plans. MMG, an Australian headquartered company owned by China, has expressed its dedication to doubling Khoemacau’s production and transforming it into one of the most significant high-grade copper operations in Africa.
Nan Wang, the Executive General Manager for Australia and Africa at MMG, stated that while the immediate focus is on maintaining a consistent production level of 60ktpa, there are solid plans to increase Khoemacau’s production capacity. The company aims to double its production from 3.65Mtpa to 8.15Mtpa, resulting in an increase in payable copper from approximately 60ktpa to around 130ktpa.
To achieve this expansion, Khoemacau has completed a pre-feasibility study on the project and a solar power initiative. The next step is to conduct a feasibility study, which will pave the way for increased production capacity. Additionally, Khoemacau has identified extensive exploration opportunities across its license area, positioning the company for an exciting new phase of development.
The current Khoemacau operation reached full production and nameplate capacity in December 2022, following over a decade of investment totaling over P10 billion. This significant investment allowed for an intense exploration program, resulting in the development of the most automated underground mining operation in Botswana. The first concentrate was produced in June 2021, and the product entered the export market in July of the same year. Throughout 2022, the company has been working on the pre-feasibility study for the expansion project, with the feasibility study scheduled for the following year.
The expansion plans will involve the construction of a new world-class process plant in Zone 5, where the current mining of ore takes place. This new plant will be larger than the existing one in Boseto, which currently receives ore from Zone 5. The expansion will also involve the development of new underground mines, including Mango, Zone 5 North, and Zeta North East. These additional mines will bring the total number of underground shafts at Khoemacau to six. The ramp-up of production from the expansion is expected to occur in 2026.
Khoemacau, which acquired assets in the Kalahari Copper Belt after the liquidation of Discovery Metals in 2015, currently employs over 1500 people, with the majority being Batswana. The Khoemacau Mine is located in north-west Botswana, in the emerging Kalahari Copperbelt. It boasts the 10th largest African Copper Mineral Resource by total contained copper metal and is one of the largest copper sedimentary systems in the world outside of the Central African Copperbelt.
The mine utilizes underground long hole stoping as its mining method and conventional sulphide flotation for processing. Resource drilling results have shown the existing resources to have continuity at depth, and there are several exploration targets within the tenement package that have the potential to extend the mine’s life or increase productivity.
The Zone 5 mine has already ramped up production, and further expansion in the next five years will be supported by the deposits in the Zone 5 Group. The estimated mine life is a minimum of 20 years, with the potential to extend beyond 30 years by tapping into other deposits within the tenement package.
In conclusion, the commitment of MMG Group to Khoemacau’s expansion plans signifies a bright future for Botswana’s largest copper and silver operation. With the completion of pre-feasibility and feasibility studies, as well as significant investments, Khoemacau is poised to become one of Africa’s most important high-grade copper operations. The expansion project will not only increase production capacity but also create new job opportunities and contribute to the economic growth of Botswana.
Business
Khoemacau Copper Mining to be acquired by MMG Limited
Khoemacau Copper Mining, a leading copper mining company, has recently announced its acquisition by MMG Limited, a global resources company based in Australia. This acquisition marks a significant milestone for both companies and demonstrates their commitment to continued investment, growth, and sustainability in the mining industry.
MMG Limited is a renowned mining company that operates copper and other base metals projects across four continents. With its headquarters in Melbourne, Australia, MMG has a strong track record in mining and exploration. The company currently operates several successful mines, including the Dugald River zinc mine and the Rosebery polymetallic mine in Australia, the Kinsevere copper mine in the Democratic Republic of Congo, and the Las Bambas Mine in Peru. MMG’s extensive experience and expertise in mining operations make it an ideal partner for Khoemacau.
MMG’s commitment to sustainability aligns perfectly with Khoemacau’s values and priorities. Khoemacau has always placed a strong emphasis on safety, health, community, and the environment. MMG shares this commitment and applies the principles of good corporate governance as set out in the Corporate Governance Code of the Hong Kong Listing Rules. As a member of the International Council on Mining and Metals (ICMM), MMG adheres to sustainable mining principles, ensuring responsible and ethical practices in all its operations.
Over the past 12 years, Khoemacau’s current shareholders have made significant investments in the development of the company. With approximately US$1 billion deployed in the project, Khoemacau has successfully transformed from an exploration and discovery phase to a fully-fledged operating copper mine. The completion of the ramp-up of the Zone 5/Boseto operations has set the stage for the next phase of expansion.
With the acquisition by MMG, Khoemacau is poised for an exciting new chapter in its development. The completion of a pre-feasibility study on the Khoemacau expansion and a solar power project has paved the way for increased production capacity. The feasibility study will be the next step in doubling the production capacity from 3.65 million tonnes per annum (Mtpa) to 8.15 Mtpa, resulting in a significant increase in payable copper from approximately 60,000 tonnes per annum (ktpa) to 130,000 ktpa. Additionally, Khoemacau has extensive exploration opportunities across its license area, further enhancing its growth potential.
The CEO of Khoemacau, Johan Ferreira, expressed his gratitude to the current owners for their stewardship of the company and their successful transformation of Khoemacau into a fully operational copper mine. He also highlighted the company’s focus on the expansion study and its vision for the future with MMG. Ferreira emphasized that the partnership with MMG will ensure Khoemacau’s long-term success, delivering employment, community benefits, and economic development in Botswana.
MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.
The sale of Khoemacau to MMG is subject to certain conditions precedent and approvals, with the expected closing date in the first half of 2024. This acquisition represents a significant step forward for both companies and reinforces their commitment to sustainable mining practices, responsible resource development, and long-term growth in the mining industry.
In conclusion, the acquisition of Khoemacau Copper Mining by MMG Limited signifies a new era of investment, growth, and sustainability in the mining industry. With MMG’s extensive experience and commitment to responsible mining practices, Khoemacau is well-positioned for future success. The partnership between the two companies will not only drive economic development but also ensure the safety and well-being of employees, benefit local communities, and contribute to the overall growth of Botswana’s mining sector.
Business
BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.